Kinston Industries is considering investing in a machine that willcost $125,000 and will last for three years.
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Kinston Industries is considering investing in a machine that willcost $125,000 and will last for three years. The machine will increase revenuesby $120,000 each year. The cost of goods sold willbe 50% of revenues and the net working capital requiredequals 10% of incremental revenues. The appropriate cost of capitalis 10% and Kinston is inthe 35% tax bracket.
The present value of incremental cash flows associated with capital assets and net working capital is?
Related Book For
Financial and Managerial Accounting Using Excel for Success
ISBN: 978-1111993979
1st edition
Authors: James Reeve, Carl S. Warren, Jonathan Duchac
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